Europe Reflects on What It Means to Be Single

Europe Reflects on What It Means to Be Single

During the week of October 15th, as the future of the European Union hangs on by a thread, the EU will celebrate the 20th anniversary of the European Single Market, marking the historic achievement with a week of festivities in Brussels. The Single Market not only changed the everyday lives of Europeans but radically altered the business landscape. In preparation of the launch, the organizers ask, “What do you think are the Single Market’s greatest achievements over the last twenty years, and what are the greatest challenges as we look to the next twenty years?” Our answer to both is the regulation of intellectual property.

On January 1, 1993 the dream of a single European market became a reality, creating an internal market for the initial twelve member states; Belgium, Denmark, Germany, Ireland, Greece, Spain, France, Italy, Portugal, and the UK. Starting with the Single European Act of 1986, hundreds of pieces of legislation were drafted and enacted with the intention of harmonizing local laws and regulations of each member state. The Single Market is now home to over 500 million people in twenty-seven countries, allowing people and goods to freely flow across borders, increasing trade, and stimulating competition.

The Single Market is particularly valuable to trademark owners, as it has allowed the EU to develop an easy process for companies to protect their intellectual property from imposters. A trademark distinguishes a product by indicating its source or origin, by guaranteeing that its quality conforms to consumers’ expectations, and by clearly identifying that product in advertising and publicity. Although trademarks provide protection against imitators and those wishing to trade on the success of existing brands, national borders limit such protection. Without a single market, trademarks need to be separately registered in each country. The Community Trademark was established in 1993, making trademark registration in the European Union easier. When companies register Community Trademarks in Europe’s Single Market, they avoid the hassle of registering in each of the twenty-seven different states. The goal of Community Trademark in the EU is to provide a unitary system of trademark management, enforceable in all member states, that helps remove barriers to the free movement of goods in a thriving internal market. The Community Trademark is one of many harmonizations of laws necessary to an internal market and has been such a success that the EU is currently in talks to create a similar system for registering patents.

Though the EU’s trademark harmonization is an achievement that cannot be overstated, that harmonization is not without its challenges. First, when a trademark has wider reach in a larger market, there is an increased chance that another party will raise an objection or claim that the applicant’s mark will lead to consumer confusion. Creating the Community Trademark in the Single Market made it difficult to register a mark without objection, with the average time for opposition proceedings ranging from three months in Spain to five years in Cyprus. While objections are a necessary element of trademark laws, the Single Market struggles to provide uniform and effective resolution of claims.

Second, the Community Trademark did not displace the national registration system or eradicate the different trademark regulation schemes in various member states. Critics argue that maintaining two separate systems is a bad idea. Some worry that maintaining the national systems has prevented the goal of free movement of goods and competition from being achieved. Without abolishing each nations trademark laws in exchange for harmonized regulations, the Single Market is not a true internal market with real market conditions, and the barrier to the free movement of goods is not fully lifted. Others worry that the Community Trademark will displace the national trademark systems of smaller member states. If that were to happen, smaller member states would likely be at a disadvantage relative to larger member states, as many of the smaller states need international registration schemes to provide efficient and effective domestic registration not adequately encompassed by the Community Trademark structure.

Third, the Community Trademark can be woefully ineffective in punishing those who intentionally infringe on the intellectual property rights of others. Typically, the Community Trademark leaves owners of a mark with injunctive relief as their only remedy, unlike trademarks registered in the national registration of each country, which may impose a wider range of penalties. Moreover, infringement penalties under the Community Trademark system can be difficult to enforce. Hard-to-enforce community trademarks are bad for Europe, as unprotected or unenforceable intellectual property rights can create havens for piracy and counterfeiting, leaving businesses without meaningful control of their marks and disrupting international trade in one of the world’s most important markets. The disparity between Community Trademark and national systems forces businesses to choose between easy registration with difficult enforcement and difficult registration with comprehensive enforcement.

Despite the many challenges posed by the Single Market, Single Market week is a celebration that’s well deserved. The Community Trademark system in the EU stands as an achievement for the European community, and the legacy is sure to remain for quite some time. Though whether the EU can take stock of its successes and push forward into the future by addressing the challenges that remain is a lingering question that lacks a clear answer. Single Market week is a step in the right direction – an opportunity for the leaders and the people of the Europe to celebrate their achievements, and a chance to ask how the challenges that arise from the single market will be met. The news media will focus on the trials that Europe faces economically, certainly, though the legal community may be more transfixed by whether intellectual property protection may become broad enough to become meaningful without infringing on the rights of each member state. Whether the tension between nationalist and unified systems may be reconciled in the EU remains to be seen.